War Could Slow CSRS Legislation

A bill that would lower U.S. Postal Service pension contributions and potentially keep rates steady until 2006 has been included in the House and Senate budget resolutions, which Congress is expected to act on by April 15.

"It's very good news that we are in the resolution," said Bob McLean, executive director of the Mailers Council. "If we're not in the resolution, the issue dies."

However, the focus on the war in Iraq could delay approval of the budget resolutions, McLean said.

"It's very possible that the whole process could be delayed, not derailed, because of the current circumstances," he said.

The bill, HR 735, which unanimously moved out of the House Government Reform Committee this month, requires the USPS to use some of the savings to pay down its $11 billion debt in fiscal years 2003, 2004 and 2005. Other savings would be used to continue funding retiree health benefits and hold postal rates steady until 2006. It has 44 cosponsors.

The move to reduce the contributions came after reviews by the federal Office of Personnel Management and the General Accounting Office found that the USPS was paying too much into the Civil Service Retirement System. Pension contributions are fixed by law and cannot be changed without congressional approval.

The postal service estimates it would save $2.9 billion in fiscal year 2003 and $2.8 billion in FY 2004 through lower contributions.

Quick passage is important because the postal service has said it will file a rate case this year if pension contributions are not lowered. Postal officials would not comment on when they plan to file, but insiders said it likely would come in August and would not include provisions for phased rates.

The House bill is similar to a Senate bill that passed unanimously out of the Senate Committee on Governmental Affairs on March 6. Differences between the House and Senate versions would be resolved in reconciliation.

"Once it gets to the budget reconciliation process, everything could change," McLean said. "They could say 'let's go with the Senate version.' Or they could say 'let's throw it out altogether.' Or they could say, 'let's do something entirely different.'"